This paper studies the use of labor
markets to mitigate the impact of violent shocks on
households in rural areas in Colombia. It examines changes
in the labor supply from on-farm to off-farm labor as a
means of coping with the violent shock and the ensuing
redistribution of time within households. It identifies the
heterogeneous response by gender. Because the incidence of
violent shocks is not exogenous, the analysis uses
instrumental variables that capture several dimensions of
the cost of exercising terror. As a response to the violent
shocks, households decrease the time spent on on-farm work
and increase their supply of labor to off-farm activities
(non-agricultural ones). Men carry the bulk of the
adjustment in the use of time inasmuch as they supply the
most hours to off-farm non-agricultural work and formal
labor markets. Labor markets do not fully absorb the
additional labor supply. Women in particular are unable to
find jobs in formal labor markets and men have increased
time dedicated to leisure and household chores. Additional
off-farm supply does not fully cover the decrease in
consumption. The results suggest that in rural Colombia...

The 2008-09 economic crisis has had a
long-lasting negative impact on the Mexican economy. This
paper examines labor market dynamics in Mexico in light of
the crisis. The labor market has been characterized in
recent years by low relative unemployment, but high levels
of informal jobs, low-growth, and almost stagnant real
wages. In this context, the crisis destroyed a wide number
of formal jobs, and even informal, increasing the
unemployment rates to pre-crisis levels. Manufacturing was
the sector that endured the largest job losses during the
crisis and wages decreased for all sectors. The government
of Mexico implemented a variety of programs to cope with the
crises. However, these measures were too limited to
counteract the large negative impact of the crisis on labor markets.

In this paper the authors use a search
and matching model of multi-sector labor markets, to
understand the channels through which economic shocks affect
labor market outcomes in developing countries. In the model
workers can be employed in agriculture, formal or informal
urban jobs, or unemployed. Economic shocks are manifested as
either increased turbulence in the formal/informal sectors
or a decrease in overall sectoral productivity. By
calibrating the model to Indonesia and Mexico, the authors
are able to understand how the 1998 Indonesian crisis and
the 2001 Mexican recession translated into labor market
outcomes. They then venture to simulate how the current
financial crisis might affect the allocation of labor and
earnings across sectors, in these countries. The results
suggest that in both countries past crises have increased
the degree of turbulence of the formal sector, increasing
job destruction. However, while in Indonesia the crisis
affected the overall formal sector productivity, this was
not the case in Mexico. This explains the larger blow to
formal wages -- relative to the size of the shock- witnessed
by Indonesian workers. The response of the informal sector
was also different: In both countries the informal sector
was able to act as a buffer...

This edited volume brings together the
papers presented at the conference, "Rethinking the
Role of Jobs for Shared Growth," held in Washington,
DC, in June 2006. The common theme is that of mobility in
the labor market. As growth is related to sectoral shifts in
economic activity, the mobility of labor plays a crucial
role in ensuring sustainable growth whose benefits are
shared amongst all individuals. The papers in this volume
focus on selected priority issues at the frontier of
research in the microeconomics of labor markets in
developing countries, multi-segmented labor markets, the
role of informal employment and self-employment, the effect
of worker mobility on income, and the impact of firm
dynamics on growth and employment. These are important parts
of the puzzle and contribute to a better understanding of
the role of employment in the economic development of
low-income countries.

This paper addresses labor markets in
Haiti, including farm and nonfarm employment and income
generation. The analyses are based on the first Living
Conditions Survey of 7,186 households covering the whole
country and representative at the regional level. The
findings suggest that four key determinants of employment
and productivity in nonfarm activities are education,
gender, location, and migration status. This is emphasized
when nonfarm activities are divided into low-return and
high-return activities. The wage and producer income
analyses reveal that education is key to earning higher
wages and incomes. Moreover, producer incomes increase with
farm size, land title, and access to tools, electricity,
roads, irrigation, and other farm inputs.

This report, which has been prepared by
the World Bank in cooperation with the National Statistical
Committee, provides an assessment of poverty in the Kyrgyz
Republic using the most recent data available. The objective
of this report is to understand to what extent economic
growth has reduced poverty and led to improved living
conditions for the population during 2000-2005. The report
also attempts to answer three questions about the Kyrgyz
Republic: what is the profile of poor? How has economic
growth affected the level and composition of poverty? How
has the labor market contributed to changes in poverty? The
report is divided into two volumes. The first volume begins
with this chapter which provides an international comparison
of social and other key indicators of the Kyrgyz Republic
followed by a profile of the poor based upon 2005 household
survey data. The second chapter analyzes the linkages
between growth and poverty during 2000-2005. The third
chapter provides our key findings of labor market outcomes
and poverty and what the implications are for policy making.
The final chapter synthesizes the information from the
earlier chapters and provides some policy directions. The
second volume provides a more thorough analysis of labor
markets. It covers developments in the labor market...

This paper reviews the relative importance of different components of rural labor markets, examining how their functions differ across geographical locations and change over time, and inquiring into the difference in the contribution to poverty reduction among different jobs (i.e., agricultural wage employment, formal and informal nonfarm wage jobs, and nonfarm self-employment). Improving rural investment climate through investment in infrastructure and provision of credit will be helpful, because in all likelihood, increased access to nonfarm jobs, in general, and formal jobs in particular, will become a key factor affecting the improvement of living standards and poverty reduction in Sub-Saharan Africa (SSA), a phenomenon particularly visible in Asia from the mid-1980s to late-2000s which has started to appear in Africa. The development of agriculture stimulates the growth of nonfarm sectors through production and consumption linkages. Furthermore, increased farm income tends to be invested in schooling of children, who later look for nonfarm jobs, as seen in the Asian experience. Supply of such educated labor force to nonfarm sectors must have contributed to their development, and balanced development strategy for both farm and nonfarm sectors is clearly needed in SSA for achieving the twin goals of improving living standards and reducing rural poverty.

The population of Sub-Saharan Africa
stood at 854 million in 2010. Annual population growth
averaged 2.5 percent, with a relatively high sustained
fertility rate, fostered by the fact that two-thirds of the
population is under 25. The region has the highest
proportion of poor people in the world, with 47.5 percent of
its population living on less than $1.25 a day, as measured
in terms of purchasing power parity in 2008. It is also the
only region in which the number of poor is still rising.
This book contributes to knowledge on the functioning of
urban labor markets in Sub-Saharan Africa by investigating
following questions: which individuals lack access to
employment or are employed beneath their capacities; does
education improve working conditions?; what opportunities
does the labor market offer to climb the social ladder?; is
the lack of good-quality jobs for adults and the poverty it
implies one of the reasons for the prevalence of child
labor?; do women and ethnic minorities have the same access
to the labor market as everyone else?; how does the formal
sector live alongside the informal sector?; what role does
migration play in the functioning of labor markets?;and are
there traits common to all urban labor markets in Africa...

The Turkish economy was hit hard by the
global economic crisis, but recovered fast and strong. The
economy had already started to slow down in 2007, but the
global financial events of late 2008 led to a sharp
contraction starting in the last quarter of 2008 until
growth resumed in the last quarter of 2009. The recovery was
rapid, with growth reaching 9 percent in 2010 and 8.5
percent in 2011. This study looks at how the labor market
fared during the recent downturn and recovery and informs
policies to manage labor markets through the economic cycle
and address the jobs challenge in Turkey. The study
investigates: (i) pre-crisis labor market trends and the
structural jobs challenge in Turkey; (ii) aggregate and
distributional impacts of the recent crisis, and subsequent
recovery, on the labor market; and (iii) recent policy
measures and existing labor market institutions in the
context of observed labor market outcomes. Based on this
analysis and a comparison with selected countries from
around the world...

This policy note outlines short, and
medium-term policy options for addressing critical
challenges affecting labor markets in Mexico, and in
particular labor productivity. As labor is the main source
of income for most of the population, poverty is closely
linked to underemployment and low wages. Yet labor markets
have played a limited role in poverty reduction in Mexico.
Labor income accounted for just 22 percent of the decline in
poverty in Mexico over the last decade compared with 38
percent in the rest of the region. Between the third quarter
of 2008 and the third quarter of 2011, the labor income
poverty index2 continued to decline in Brazil, Ecuador, and
Peru but increased in Mexico. The equivalent measure
produced by CONEVAL (Consejo Nacional de Evaluation), shows
the labor poverty trend to be increasing through the first
quarter of 2012. Finding the right bundle of policies to
improve labor productivity and the functioning of the labor
markets can serve to improve economic growth and welfare outcomes.

This report analyzes the paths by which
developing country labor markets adjust to permanent
trade-related shocks. Trade shocks can bring about
reallocation of labor between industries, but the presence
of labor mobility costs implies economy-wide losses because
they extend the period of economic adjustment. This report
focuses primarily on the adjustment costs faced by workers
after a trade shock, because of magnitude and welfare
implications and policy relevance. From a policy viewpoint,
understanding the relative magnitudes of labor mobility and
adjustment costs can help policymakers design trade policies
that are consistent with employment objectives, can be
complemented by labor policies, or support programs to
facilitate labor transitions, or both. To complement and
validate the analysis based on structural choice models, the
study designed a distinct empirical approach using
reduced-form econometric estimation strategies. This
approach examines the impact of structural reforms and
worker displacement on labor market outcomes. This makes it
possible to estimate the time required to adjust to a
trade-related shock...

Why are financial crises associated with a sustained rise in unemployment? We develop a tractable model with frictions in both credit and labor markets to study the aggregate and micro-level implications of a credit crunch—i.e., a sudden tightening of collateral constraints. When we simulate a credit crunch calibrated to match the observed decline in the ratio of debt to non-financial assets of the United States business sector following the 2007–2008 crisis, our model generates a sharp decline in output—explained by a drop in aggregate total factor productivity and investment—and a protracted increase in unemployment. We then explore the micro-level impact by tracking the employment dynamics for firms of different sizes and ages. The credit crunch causes a much larger reduction in the net employment growth rate of small, young establishments relative to that of large, old producers, consistent with the recent empirical findings in the literature.

Countries in Latin America and the
Caribbean are experiencing the impact of the international
financial crisis on labor markets across different
dimensions, such as employment, wages and the quality of
labor market arrangements. This note reviews a selected
group of countries to assess the speed and severity of labor
market impacts. It identifies patterns in the changing labor
market conditions, such as specific sectors or types of
workers being affected. It also describes countries'
preparedness and capacity to respond to the crisis and the
specific policy responses being implemented. The review
finds a large variation in impacts and responses in the
context of increases in unemployment rates that range from
0.4 to 2.1 percentage points. The impacts of the crisis are
evolving rapidly but seem to have a more noticeable negative
effect among salaried workers in Brazil and Chile whereas in
Colombia non-salaried workers have been affected the most.
Mexico shows both types of workers as being seriously hit by
the recession.

The Turkish economy was hit hard by the
global economic crisis, but recovered fast and strong. The
economy had already started to slow down in 2007, but the
global financial events of late 2008 led to a sharp
contraction starting in the last quarter of 2008 until
growth resumed in the last quarter of 2009. The recovery was
rapid, with growth reaching 9 percent in 2010 and 8.5
percent in 2011. This study looks at how the labor market
fared during the recent downturn and recovery and informs
policies to manage labor markets through the economic cycle
and address the jobs challenge in Turkey. The study
investigates: 1) pre-crisis labor market trends and the
structural jobs challenge in Turkey; 2) aggregate and
distributional impacts of the recent crisis, and subsequent
recovery, on the labor market; and 3) recent policy measures
and existing labor market institutions in the context of
observed labor market outcomes. Finally, the study links
policies to manage labor markets through the cycle with
measures to address the longer term...

This paper addresses three areas of the rural labor market-employment, labor wages, and agriculture producer incomes. Findings show that the poor allocate a lower share of their labor to farm sectors than the nonpoor do, but still around 70 percent work in agriculture, and the vast majority of rural workers are engaged in the informal sector. When examining nonfarm employment in rural Argentina, findings suggest that key determinants of access to employment and productivity in nonfarm activities are education, skills, land access, location, and gender. Employment analyses show that women have higher probability than men to participate in rural nonfarm activities and they are not confined to low-return employment. Moreover, workers living in poorer regions with land access are less likely to be employed in the nonfarm sector. There is strong evidence that educated people have better prospects in both the farm and nonfarm sectors, and that education is an important determinant of employment in the better-paid nonfarm activities. Labor wage analyses reveal that labor markets pay lower returns to poorer than to richer women and returns to education are increasing with increased level of completed education and income level. And nonfarm income and employment are highly correlated with gender...

The term 'green jobs' can
refer to employment in a narrowly defined set of industries
providing environmental services. But it is more useful for
the policy-maker to focus on the broader issue of the
employment consequences of policies to correct environmental
externalities such as anthropogenic climate change. Most of
the literature focuses on direct employment created, with
more cursory treatment of indirect and induced job creation,
especially that arising from macroeconomic effects of
policies. The potential adverse impacts of green growth
policies on labor productivity and the costs of employment
tend to be overlooked. More attention also needs to be paid
in this literature to how labor markets work in different
types of economy. There may be wedges between the shadow
wage and the actual wage, particularly in developing
countries with segmented labor markets and after adverse
aggregate demand shocks, warranting a bigger and
longer-lasting boost to green projects with high labor
content. In these circumstances...

The 1990s have witnessed several
financial crises, of which the East Asia and Mexico tequila
crises are perhaps the most well-known. What impact have
these crises had on labor markets, household incomes, and
poverty? Total employment fell by much less than production
declines and even increased in some cases. However, these
aggregates mask considerable churning in employment across
sectors, employment status, and location. Economies that
experienced the sharpest currency depreciations suffered the
deepest cuts in real wages, though deeper cuts in real wages
relative to Gross Domestic Product (GDP) were associated
with smaller rises in unemployment. To some extent, families
smoothed their incomes through increased labor force
participation and private transfers, though the limited
evidence available suggests that wealthier families were
better able to smooth consumption. The initial impact of the
crises was on the urban corporate sector, but rural
households were affected as well and in some instances
suffered deeper losses than did urban families. School
enrollment declined...

This paper reviews labor market trends
throughout the developing world, identifies issues and
policy priorities across groups of countries, and derives
implications for the World Bank's new social protection
and labor strategy. Five key issues are identified: a high
and growing share of the labor force that is self?employed
or working in household enterprises, exposure to income
shocks with limited access to risk management systems, low
female participation rates, high youth unemployment rates,
and the need to manage migration flows and remittances. The
paper then details a three pronged agenda based on providing
incentives and conditions for work, improving the efficiency
of job creation, and managing risks / facilitating labor
market transitions. This suggests that the Bank should
emphasize self?employment and entrepreneurship promotion,
provision of skills and development opportunities, and
facilitation of labor market transitions into and between
jobs, while protecting workers from shocks and paying
particular attention to youth.

Artículo de publicación ISI; Through flows from 3 states, employment, unemployment and out of the labor
force, we analyze the dynamics of labor markets in Chile from 1962-2007. We
identify some periods of different labor market regimes and relate them with
changes in flexibility. We found that reforms such as that of 1967, which introduced
the “just cause” requirement to fire workers, did not help workers to keep their
jobs, but there is no evidence of significant changes in inflexibility. Other labor
regimes significantly affected transitions, but surprisingly, it was the new regime
identified in 1990, that increased mobility. We interpret this as the result of the
consolidation of a flexibility prone model that, until then, had been associated
with an unpopular imposition by the military regime. Finally, we do not find
any evidence showing that after 1998 the changes in labor participation and
consequently, that the explanations of the changes in the unemployment rate
could be associated with “added and discouraged worker effects.”

“The standard explanation of why advanced Europe has generated less work per adult than the US is that something is seriously amiss with EU labor markets. The theme of this piece is simple. Compared to an ideal competitive market, EU labor markets fall seriously short, but compared to labor markets in the US and to other markets in advanced capitalist countries, EU labor markets do not live up to their awful press. The variety of labor market institutions among EU countries, moreover, reveals a much richer picture of performance and diversity than the blanket condemnation of inflexibility suggests. I make my case in four propositions, with supporting evidence. My comparisons are with the actual labor market in the US and with other real world markets, not with the economists’ dream ideal competitive markets. I review briefly the evidence that labor markets in the EU have performed worse on the quantity side of the market but better on the price or wage side of the market than the US labor market, then consider the extent to which differences in outcomes are attributable to differences in the performance of labor markets.”